The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has put forward a set of proposed changes to the bloc’s Markets in Crypto-Assets Regulation (MiCA). The recommendations touch on investor protection, supervisory powers and newer corners of the crypto industry such as decentralised finance (DeFi), staking and crypto lending.The proposals came in response to the European Commission’s consultation on the MiCA review. ESMA called for stricter rules governing how crypto products are marketed, with particular attention paid to promotions run through influencers and other third parties. Greater transparency around costs was also part of the regulator’s recommendations.Staking, lending and borrowing services would face proportionate new requirements under the plan. ESMA wants disclosure rules in this area to cover risks, rewards, collateral arrangements and potential losses, giving investors clearer information before they commit funds to these products.Further, the regulator wants a stronger EU-wide capacity to detect, block and deactivate fraudulent websites, along with the ability to freeze crypto assets when market abuse or terrorist financing is suspected. It is also asking for reinforced authority to handle third-country firms that solicit EU investors without holding MiCA authorisation. A further proposal would introduce explicit rules barring regulated crypto firms from offering services tied to stablecoins that do not meet MiCA’s requirements.DeFi emerged as another focus area in the proposals. ESMA recommended clearer criteria for determining when an activity actually qualifies as decentralised, since that distinction currently carries regulatory weight. The regulator also proposed creating a new category of regulated crypto asset service specifically for firms that provide users with access to DeFi protocols.Token classification featured prominently as well. ESMA backed new rules for categorising crypto assets, including hybrid tokens that blend characteristics of different asset types. It also recommended being granted the authority to issue binding opinions on how individual tokens should be classified, which would give the regulator more direct influence over how ambiguous assets are treated under MiCA.5 Best Meme Coins to Buy This SummerGenesis Pursues $689M From Gemini in Legal Battle Over ‘Preferential Transfers’SEC lawsuit against Binance reveals concerning allegations, exchange dismisses claims as “baseless”Singapore’s MAS Collaborates with UK, Japan, and Swiss Regulators for Crypto Initiatives